Volkswagen negotiators in Mexico have averted a strike at the Puebla
assembly complex by agreeing to increase hourly workers' wages by 5.5
percent and giving them an additional US$12 a month in grocery vouchers.

"It is an increase within the parameters of the automotive industry,"
Independent Union of Volkswagen Workers (SITIAVW) leader Jose Luis Rodriguez said. "The important thing is we avoided a conflict."

Announced in the early hours of Tuesday, the deal beat a deadline set by the
union by a matter of minutes.

The union, which represents 75 percent of the complex's 16,000 employees,
had threatened to strike if an agreement could not be reached by the

In a statement Volkswagen de Mexico said it had wrung "important agreements"
on productivity and competitiveness from the SITIAVW.

Across-the-table talks lasted three weeks and were held in Mexico City in
the presence of mediators from the labour secretariat.

The complex, 60 miles south east of the Mexican capital, is Volkswagen's
only assembly operation in North America and is the sole producer of the New

It was paralysed by a 19-day strike over wages a year ago.